This current market....

[jim584672]

Leverage $1,000,000 with 3x ETFs with calls, what could go wrong?

 

[NW-Bound]

Are you doing that? I admire [-]you[/-] the size of your, er...., things.

One could turn $1M into $2M or $3M. Or he can lose it all.

That's big-stake gambling, not the piddly play aiming to make a few 100's or $Ks we talk about here.

 

[jim584672]

No way.

Seems better than Vegas.

 

[NW-Bound]

Yes, risky as it is, it is better than Vegas in that you can admit that you are wrong, capitulate and cut your loss, instead of waiting to the end to lose it all.

In Vegas, you cannot change your mind and retract your money after putting it all on red.

 

[Mulligan]

Yes, risky as it is, it is better than Vegas in that you can admit that you are wrong, capitulate and cut your loss, instead of waiting to the end to lose it all.

In Vegas, you cannot change your mind and retract your money after putting it all on red.

That is true. I am oddball I admit. I have my "gambling money" for Vegas and my investing money to invest. You would think someone who gambles frequently like I do could have more intestinal fortitude to buy common stocks. But I don't...Wait, I do have 500 shares in an electric utility stock...What an aggressive high roller investor I am!


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[NW-Bound]

Perhaps it's because you do not expect to gain with the money you take to Vegas, hence treat it and the invest money differently. On the other hand, the most I have lost in Vegas was $10 at a slot machine many years ago, and I did not get any enjoyment out of that.

I like active investing because the results are not completely driven by randomness but also by how one acts. And overcoming greed and fear is not as easy as it seems.

About making a bit of money on the side, it looks like people may not realize that options and other side bets can be used in a conservative and defensive manner, and not with a goal to score big. An example was discussed in the market timing thread started by LOL, where a holding of a market index ETF is used in conjunction with a deep-in-the-money call option to secure a 4% to 5% annual return that is protected and isolated from market swings. That is unless the market has a big drop of another 20%. In my view, it has a better return than CD, and the additional risk is small and worth it.

When I try to make a bit of extra money with side bets, the intention is not to make a few hundreds or $K net each week. When the market goes down, it is impossible to make money unless you are net short of equities. As I am still 60% in stock, the side bets are to make use of market short-term swings to hedge the long-term holdings, to reduce the loss.

If the market crashes, and I end up losing $150K net using these moves, compared to $200K if I do nothing, then I consider myself successful. Posters who read LOL's thread understand this.

 

[Mulligan]

Perhaps it's because you do not expect to gain with the money you take to Vegas, hence treat it and the invest money differently. On the other hand, the most I have lost in Vegas was $10 at a slot machine many years ago, and I did not get any enjoyment out of that.

I like active investing because the results are not completely driven by randomness but also by how one acts. And overcoming greed and fear is not as easy as it seems.

About making a bit of money on the side, it looks like people may not realize that options and other side bets can be used in a conservative and defensive manner, and not with a goal to score big. An example was discussed in the market timing thread started by LOL, where a holding of a market index ETF is used in conjunction with a deep-in-the-money call option to secure a 4% to 5% annual return that is protected and isolated from market swings. That is unless the market has a big drop of another 20%. In my view, it has a better return than CD, and the additional risk is small and worth it.

When I try to make a bit of extra money with side bets, the intention is not to make a few hundreds or $K net each week. When the market goes down, it is impossible to make money unless you are net short of equities. As I am still 60% in stock, the side bets are to make use of market short-term swings to hedge the long-term holdings, to reduce the loss.

If the market crashes, and I end up losing $150K net using these moves, compared to $200K if I do nothing, then I consider myself successful. Posters who read LOL's thread understand this.

I agree with you, NW. And yes, I have no expectations to make money gambling (though I am up a bit last few years, hope it continues!)Its just fun adrenalin junkie thing with a bit of quasi intellectualism thrown in. It is in my entertainment budget, not investment budget.
I wish I had more of an intellectual desire to do what you do,but I don't. I understand the processes, but don't trust my implementation. That is why I stick with preferred stocks. It is easier to buy "winners" though the upside is significantly less. I can accept the 6-7% annual income and roll with the changes in daily prices (which isnt much).... It is pretty easy to find well capitalized, moated companies that can slog along with no earnings growth but easily cover the preferred divi. But I do have a "wild side"... My total stock index fund and my one utility stock!


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[NW-Bound]

Surely, people should do what they feel comfortable with.

I am willing to be a bit more adventurous with my investments, partly because this attitude has not ruined me yet, partly because you don't really know about something or what people talk about until you try it yourself.

It's not too different than cooking, or gardening. And some people do not enjoy cooking or growing things either.

 

[ETFs_Rule]

From my point of view, not enough investors sell low and buy high.

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